The credit system in France, Great Britain, and the United States Volume 1

This historic book may have numerous typos and missing text. Purchasers can download a free scanned copy of the original book (without typos) from the publisher. Not indexed. Not illustrated. 1838 Excerpt: ...Loans,--100 Paper circulation,-45 Gold in bank,-I5 Gold in circulation, 5 Gold in circulation, 5 120 120 Five millions of circulation being rendered unnecessary for the performance of exchanges, in consequence of the further increase of confidence and of the increased number of banks, may now be converted into the capital of new ones, with a view to obtain a share of the profit resulting from this increase of loans, and the account will now stand thus: No.7. Capital,-75 Loans,-'-100 Paper in circulation, 40 Gold in bank,-15 Gold in circulation, 5 Gold in circulation, 5 120 120 Here we have a constant improvement in the security and in the economy of the currency. In the first there are 60 millions of liabilities with only ten millions to meet them, and this insecure currency is maintained at the cost of the wear and tear of forty millions of gold. In the last there are forty millions of liabilities, with fifteen millions of gold to meet them, and the total cost of this secure currency is the wear and tear of twenty millions. In the first, the state of the currency is dependant upon a few men, directors of the Bank of England, who have, on various occasions, proved their total incapacity for performing the duties of regulators, while in the latter it is regulated by the laws of nature. In the first, a departure of half a dozen millions from the true course of policy might take place without being marked, except by the few who study the returns of the bank, while in the last it would be marked by all those who possessed capital and desired to invest it, and the error would be almost instantly corrected. This will be obvious to the reader on an examination of the In the first, an error of lO millions would produce no more effect upon prices than would be...